48 Pages Posted: 18 Jul 2012 Last revised: 27 Nov 2012
Date Written: July 17, 2012
This paper examines the economic justification for recent U.S. energy regulations proposed or enacted by the U.S. Department of Energy, the U.S. Department of Transportation, and the U.S. Environmental Protection Agency. The case studies include mileage requirements for motor vehicles and energy-efficiency standards for clothes dryers, room air conditioners, and light bulbs. The main findings are that the standards have a negligible effect on greenhouse gases and the preponderance of the estimated benefits stems from private benefits to consumers, based on the regulators' presumption of consumer irrationality.
Keywords: energy regulations, cost-benefit analysis, behavioral economics, consumer choice, climate policy, energy efficiency standards
JEL Classification: Q4, Q48, Q5, Q54
Suggested Citation: Suggested Citation
Gayer, Ted and Viscusi, W. Kip, Overriding Consumer Preferences with Energy Regulations (July 17, 2012). Vanderbilt Law and Economics Research Paper No. 12-24; PERC Research Paper No. 12/13. Available at SSRN: https://ssrn.com/abstract=2111450 or http://dx.doi.org/10.2139/ssrn.2111450